SEOUL, Aug. 1 (Yonhap) -- South Korean stocks closed 0.35 percent higher Thursday as investors' sentiment was boosted by better-than-expected economic data from China and the United States, analysts said. The local currency ended flat against the U.S. dollar.

Analysts said Seoul shares gathered ground as China posted better-than-expected economic data for July, indicating the country's economy may be on the recovery path. China is the biggest trading partner of South Korea.

The Chinese government said Thursday that the country's purchasing managers index (PMI) for the manufacturing sector came to 50.3 in July, a tad higher than the market estimate of 49.8.

The PMI is an index that measures the health of a country's manufacturing sector. A reading of 50 or above represents an expansion of the sector from the previous month while a reading of below 50 represents a contraction.

The better-than-expected economic growth for the April-June period posted by the U.S. also added to investors' sentiment, analysts added.

The U.S. gross domestic product, the broadest measure of economic performance, advanced 1.7 percent in the second quarter from three months earlier, hovering above a 1-percent market forecast made earlier.

Meanwhile, the Federal Open Market Committee (FOMC) meeting had only a limited impact on the market as it did not come up with new details on the future policy moves on quantitative easing. The FOMC held its two-day regular monetary meeting earlier this week.

"While the FOMC did not come up with details on the possible reduction in its quantitative easing moves, it can also be understood that the U.S. will maintain the current economic stimulus for the time being," said Ma Joo-ok, an analyst at Kiwoom Securities Co.

Foreigners scooped up more shares than they sold at a net 60.8 billion won. In contrast, individuals and institutions offloaded a net 56.8 billion won and 5.1 billion won, respectively.

The local currency ended at 1,123.50 won against the greenback, closing unchanged from the previous trading session amid abated woes over the possible cut in the U.S. stimulus for the time being, dealers said.